Microsoft Stock Testing Descending Channel Resistance

Microsoft stock is still trending lower on the short-term time frames, as price is testing the resistance of the descending trend channel on the 1-hour chart. If this resistance holds, price could move back to the bottom of the channel at $44.50-$44.75 per share.

Stochastic is pointing down, confirming that the path of least resistance is to the downside and that further losses are likely. RSI is also on the move down, which means that sellers are in control of price action at the moment.

Meanwhile, the short-term 100 SMA recently crossed below the 200 SMA, reflecting the ongoing downtrend. Price is stalling close to the 100 SMA at the moment, which might also hold as near-term resistance for Microsoft stock.

Microsoft Stock Outlook

Microsoft is currently working with Google and Amazon, its biggest rivals in the tech stock industry, on the Open Container Project. This venture is a non-profit organization housed under the governing body of the Linux open source operating system, the Linux Foundation.

“The creation of the Open Container Project is one of the most important technology industry moves this decade,” says Jim Zemlin, executive director of the Linux Foundation. They are also working with HP, IBM, Intel, Microsoft, Red Hat, and VMware, as well as Goldman Sachs.

Positive developments on this project could help keep Microsoft stock supported, which might even pave the way for an upside break of the channel resistance. If that happens, the stock could be in for a longer-term uptrend and possibly a climb up to the recent highs of $49/share or higher.

On the other hand, lack of enthusiasm for Microsoft’s newest launch of Windows 10 could drive share prices lower. Recall that Windows 8 didn’t turn out to be such a successful product compared to its predecessors so investors are split on how Windows 10 might turn out.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.

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